Tobacco Proposal Weighed

Offer Would Bring $5.8 Billion To State

November 19, 1998|By LYNNE TUOHY; Courant Staff Writer

Conference calls with lawyers, media inquiries and continued scrutiny of the 3-inch-thick proposed tobacco settlement dominated the Wednesday workday of Attorney General Richard Blumenthal, who said he has not yet reached a decision on whether to endorse the agreement.

If approved, the settlement over the next quarter-century would bring $5.8 billion to Connecticut, once the 3 percent annual inflation provision in the settlement is added to the bottom line, Blumenthal said Wednesday. The total payments before inflation is calculated, through the year 2024, would be $3.5 billion.

The final decision on whether to accept or reject the proposed settlement is Blumenthal's alone. How the proceeds from the settlement would be spent would be up to the governor and the legislature, however. The settlement sets no criteria for the proceeds' use by individual states.

Stephen A. Frayne, vice president of finance for the Connecticut Hospital Association, said Wednesday he feels strongly the money should be used to take care of past expenses and future needs of people with smoking-related illnesses.

``Our concern is where is the money going to go -- into the general fund for roads and bridges?'' He said perhaps the money should be put in a trust, rather than be deposited into the state's general fund.

Blumenthal, who must decide by Friday evening whether to sign onto the settlement, said he hopes a significant portion of the money would be earmarked for ``anti-tobacco efforts, particularly prevention and counter-marketing and education. But those decisions are for the legislature and governor to make.''

It's possible that the federal government would lay claim to a portion of each state's allotment to recover Medicaid expenses already reimbursed for smoking-related illness. Blumenthal said he and other attorneys general would ask the federal government to waive any claim to the settlement proceeds if the deal is approved.

Attorneys' fees would not be deducted from Connecticut's share of the $206 billion settlement. The agreement includes a pool of $1.2 billion for attorneys' fees.

States representing a total of 80 percent of the nation's Medicaid caseload must approve the settlement for it to be enacted, which is not considered an obstacle; lawyers for both California and New York helped negotiate the deal.

If Connecticut opts not to sign the settlement, its lawsuit against the tobacco companies would proceed.

Blumenthal's consideration of the settlement has been laced with skepticism.

``It contains a number of very complex and highly significant provisions that have to be scrutinized very closely, because the industry has proven extraordinarily adroit at exploiting ambiguities and loopholes in past agreements and laws,'' Blumenthal said.